I think we'll go ahead and get started. My name is Jason Celino, and I'm one of the software analysts here at KeyBanc. With me today, I have the pleasure of introducing Procore CFO, Howard Fu. Welcome. Maybe just as a first of a warm-up question, because everyone kind of needs those, right? Interestingly, last year at our conference, you were just announced CFO. So kind of full circle here, a year later. Maybe kind of just recap us, how the last 12 months have gone, what's changed, what's stayed the same, gotten worse, gotten better. Yeah. So first thing is, Paul and I and Tooey and the board, I can't speak highly enough of the way that the transition happened. It was very seamless, to the point where it was basically not even a consideration because things were so smooth. Remember, Paul's still here, so he hasn't gone anywhere. He's still leading the Fintech initiatives for Procore, and that's been fantastic. I would say that over the last 9-12 months since I stepped into this role, I think there's been a really good evolution. And that evolution isn't something that I did myself, isn't something that I did independently or started. It started before I even stepped into the seat. I think there's been a lot more alignment, a lot more specificity in terms of aligning to the three CFO priorities that I talked about, which is around capital allocation, monetization, and operational excellence. So I think the formalization of that and the continued evolution of the dissemination of that throughout the company has been something that's evolved, that's changed. And then over the last 9-12 months, obviously from a business standpoint, we've seen some impacts from the macroeconomic environment and having to manage through that. But I think putting those things together and being more specific about how we're managing the business and how we're focusing internally has been something that the whole company has been working on, and it's been going great. Okay. Perfect. Maybe next we'll talk about kind of your midterm financial outlook. They give it Analyst Day. My associate likes to reference that Beyoncé song on the left, on the left. So maybe just talk about that. To the left or to the left? To the left. Yeah. Not a Beyoncé song here. Put your that. Go ahead. All right. Go ahead. That's your question. Yeah. Just talk about your midterm financial outlook and why you want us to kind of think to the left. Sure. I'll start by talking about even why we issued a framework like that, right? The reason we did that is because we really wanted everyone to understand the levers that we would emphasize and pull in different growth scenarios, given what was happening in terms of the macroeconomic environment and in the cyclicality in the construction industry. Also, we wanted to issue that framework to give people an understanding and clarity that in all those scenarios, what we're managing to is continuously increasing and compounding free cash flow per Share. That's why we issued that framework, right? So you knew the levers that we were going to pull. If this happened, then this is what we would emphasize. In terms of moving to the left side of the framework, that's a reflection of what we started to see in the back part of fiscal 2023. We started to see customer impact starting in Q1 of last year. It didn't really show up in cRPO because cRPO is a buildup of what has come before, not just in a particular quarter. It started to show up in cRPO growth in Q3. We told you it was going to happen in Q4, and we're telling you what's going to happen in the first part of this year and then how that rebounds in the back part of this year. And so it's really based on what we've seen, and it's really our transparency to make sure there's no surprises for folks. Okay. So I guess before I get to my modeling-type questions, anecdotally, the types of conversations you're having with customers or Tooey's having, I guess, what are they saying about their project backlogs and then that near-term outlook for the industry? Yeah. So nothing has really changed at all since the conversations from the back part of last year. Backlogs still remain strong. That's what we're consistently hearing from folks. And what we're consistently hearing from customers is that there's still the same cautiousness that they took in last year. They're still taking that same approach in terms of cautiousness, in terms of ACV and volume commitments that they're making. A lot of it, I think, is in a little bit of a wait-and-see mode in terms of what's going to happen in the broader economy. Okay. So the cRPO metric is probably the one everyone always looks at. It's the metric that you're telling us for the first half could dip below 20% and then accelerate in the second half. I guess, give us that context of that linearity and why we might see that trough. Sure. The first thing is that we're giving you the linearity of cRPO. Basically, we're telling you the seasonality of our bookings. So first of all, let's just be clear on that piece. There's a couple of components that I'll talk about. One is coming out of last year and really starting in the beginning of last year, the midpoint of last year, we started to see better durability in the upper end of the market. And we also started to see that expansion was holding up better than the new logo. And so what we did was we started to really emphasize and shift our resources consistent with where that strength is. And just from that going into fiscal 2024, the first factor is really about the mix of what the business is from a segment standpoint. And so when you think about moving up market and the time it takes for the capacity to get productive and the mix of the business and the enterprise space and the sales cycles that it takes, it's a longer sales cycle. And so there's really a mix. And part of the reason we wanted to make sure we called out H1 versus H2 was when we start to report H1 and H2 CRPO growth, we didn't want folks to think that that was anything fundamentally that was changing about what was going on in the business. It was a lot of a mix. The other piece about confidence in the back part of the year versus the first part of the year in terms of that growth is when we started to see the macroeconomic impacts in Q1 of last year and over the last 4 or 5 quarters and the sixth quarter into Q2 of this year, the thinking is that the industry is we use the word acclimating to how to operate in this environment. And so as they adjust their ACV commitments to lower volume commitments and higher basis points, we're thinking that those would be almost flushed out at that point over the next 18 months from Q1 of last year, which happens to be essentially our average contract length. And so as they come up for renewal in the back part of fiscal 2024, look, could it get worse? Sure. Something would have to go dramatically even more negative than what we've seen currently for that to go negative. Our assumption and our plan right now is that everything remains just as cautious as it was last year. Okay. Is it possible for sequential cRPO growth to go negative? Negative cRPO growth? Sequentially. In. Sequentially? Yeah. The lower dollar amount? Yeah. Yeah. In the first part of the year, yeah. Okay. I guess what would drive that? It's the same type of dynamics. It's the same type of dynamics that would drive the sequential declines. Okay. So when we think about that second half, it sounds like we're kind of just waiting for the go-to-market and the capacity to ramp. But it would kind of imply you see some pretty substantial bookings quarters in that period. So I don't know if there's a way to kind of decipher the go-to-market kind of contribution to the just recovery and kind of the sales cycle renewal dynamics or if there's any other factors. But maybe just that last question there. The first part is, I assure you, we're not just waiting. There's a lot that we're doing to execute to the emphasis of that part of the market in terms of continuously improving our go-to-market processes, our organizations investing in different parts of the lead funnel and so forth in the pipeline funnel. So I assure you we're not just waiting around. Other factors are any other factors that we might be thinking about. Interest rates are a factor. The overall economy and how they react to the interest rates are a factor. So it's just a lot of these factors will work itself into the psyche and the mentality of the buyer of Procore. That's really what we're trying to assess as we come up through the first half of this year going into the back part of this year to see what those dynamics are, what the actions that are going to be taken by our customers is going to be versus just guessing at what the sentiment is, right? That's really what we're looking to find out more as we execute what in Q2. Okay. Perfect. I did want to touch on the cross-sell initiative. I know that's kind of a newer area and feeds that free cash flow thesis a little bit. I guess, can you talk about that historical mix of cross-sell and construction volume-related versus cross-sell of the actual modules? So historically, our bookings distribution has been pretty evenly split, almost exactly 50/50 between new logo dollars and expansion dollars. Then specifically in the expansion dollar piece, it's been roughly around 80% volume expansion historically and 20% cross-selling products. In fiscal 2023 and specifically towards the back part of 2023, not only did we start to see the expansion proportion get bigger above 50%, we also started to make progress in terms of that cross-sell component to tip above 20%. That's what we expect to see going into fiscal 2024 as well. In terms of some of the things that we're doing, there's a number of dimensions, one of which is making sure that we continue to make improvements in our core product. Now, that might seem counterintuitive and say, "Why is that something that drives cross-sell?" It's because having a foundation and continuing to improve and have that strength and that value in that foundation actually almost gives us the right to really engage our customers to do that cross-sell piece. And in addition to that, we continue to make progress along the entire spectrum of the construction lifecycle in terms of the offerings that we provide to all three different stakeholders. And then also the third piece, in addition to some of those product components, is really to continue to align our go-to-market motions to some of the cross-sell pieces. So as an example, this year, we started to provide different types of compensation accelerators to cross-sell bookings versus simply volume expansion. Instead, if you book $1 of a cross-sell, we would pay more to an AE for that cross-sell than if they just expanded for that sales expansion. Okay. I mean, salespeople follow the money, right? So I guess, when did you make that change, or when did you? This is this year. The beginning of this year is when we did something with that. Okay. Interesting. And then just feedback from the salespeople, are they just following where the puck could go? So again, it's not going to be binary, right? So there's a lot of components to it. One of the components is going to be first setting the overall magnitude of that quota, right? When you set the magnitude of that quota, what we've done is we set the quota such that you have to do both expansion and cross-sell to hit that quota. And in addition to that, layering on top the incentive piece to support that, I think those things build up to a motion that's much more conducive to the cross-sell piece. Okay. And And then maybe if I think about it a different way, why wasn't this part of the playbook before? Was it just the maturity of the portfolio? I think it was both the maturity of the portfolio, maturity of our organization, maturity of our motion. Frankly, when you think about an AE and what they're going to go after, to your point about following where the incentives are, frankly, it was easier to go after an upsell than it is to go after a cross-sell. There was still tremendous and there still is a tremendous amount of opportunity there. But as we start to recognize the long-term benefits of having multiple products and an increasing number of products for any particular customer, then we start to evolve and adjust our incentives. Okay. So in addition to maybe this effort to be more efficient on kind of the go-to-market, when we think about the operating margin improvement, the free cash flow focus, are there any other levers that you're trying to pull? For Free Cash Flow and so I think everything leads kind of back to those pieces, right? I think there's going to be levers around product. There's going to be levers around especially over the medium and longer term around geographic locations in terms of where we grow. And then there's going to be levers that we pull in specifically around how we think about our capital allocation, right? So when you think about Free Cash Flow per Share, the main driver, main focus is still going to be growth that drives Free Cash Flow. And so we want to make sure that we don't over-index on margin too soon to make sure that growth is still the primary driver. But then in terms of capital allocation, by the end of this year, we're going to have a bigger bank account in terms of cash that's in our coffers. To think about what we want to do with that, both in support of growth, either organic or M&A or potentially some kind of a share buyback if that makes sense, is all in the toolbox. Okay. Because over the last two years, you've made a lot of good progress on the margin expansion. It sounds like you'll make good progress, potentially more progress this year. What's the right framework that we should think of? Then is there anything that holds Procore back from enjoying those really high vertical software margins investors know and love? The right framework, we believe, is still what we shared back at the Investor Day, right? We did a lot of work to make sure that that was the right framework that would sustain us in terms of where we emphasized those different levers over the next few years in the medium term. And so that framework is still valid. I'm sorry. The second part of your question was? I guess, where could margins go long-term? Oh. Yeah. Look, margins, we've consistently said that we believe that our margins could be on par with the best vertical software companies that are out there. So think like Veeva margins. The question for me and the balance for me is how quickly do we want to get there? And that's a critical question because a big driver of how quickly we want to get there is the opportunity in terms of the growth prospects for us. So look, I can give back margins today right away, but the industry itself is so underpenetrated from a digitization standpoint. I want to make sure that we can continue to invest and take advantage of that growth. And remember, that growth is still going to be the driver of free cash flow per share, right? So that's how I think about it. Okay. I do want to touch on international a little bit. I think that's an area that you've called out some go-to-market changes. In Q4, you actually said you were seeing signs of strength start to maybe come out of EMEA. Anything from other regions? Then I guess what gives you confidence that you can continue to drive above-average growth there? Yeah. So if I kind of just go backwards in historically how international has transpired for us, I think a lot of folks don't realize that we actually haven't been in non-U.S. markets for all that long. I think we started 2017, 2018 or something like that. And so it hasn't really been all that long. And if you think back to 2021, it was a very high-performing part of our business. And when we saw that, we started to pour a lot of resources into the international geos. And frankly, it was way more capacity than we could consume in the right way. And so we've had to go through some shifts over the last year to make sure that we get those things to the right place. And oh, by the way, throw in the macroeconomic environment impacting that, right? So there was a lot of progress that we made over the last year. Coming out of last year, you're right that we're starting to see some top-line strength. In addition to some of the foundational pieces and some foundational things that we're making is EMEA, but specifically UKI. And they're definitely coming into the year stronger than where they were in fiscal 2024. We recently hired a new leader in our APAC geo towards the back part last year. So it'll take that person some time to make some of the more broader changes in that geo, but we're making progress there. Look, longer term, we still feel like there's still such a huge opportunity in the non-US geos in terms of TAM. And we still feel like there's such a great fit for Procore in those geos. The TAM is, as we said before, larger than the US TAM. There's still a tremendous growth opportunity. Okay. Good stuff. Before I kind of talk about Fintech, are there any questions from the audience? When we think about the Fintech opportunity and the payments opportunity, I know you kind of separate them, but investors kind of put them together. Can you talk about early feedback, adoption, and what on those products? Yeah. So I'll take payments separately. So specifically on the fintech side, we're talking about historically, it's been Materials Financing and PRA or Procore Risk Advisors on the insurance side. I want to make sure folks know that we've wound down or started to continue to wind down the Materials Financing piece. We've always talked about Materials Financing as needing to get game tape to see what's the best way to solve the working capital problem in the construction industry. And so based on that, we've decided to wind that down and starting to pursue another way to solve that problem in the industry with Early Pay. So think factoring and things like that. And Paul's leading that. Procore Risk Advisors, very early on, it's something where the dynamics of the relationship between the customers and their brokers that provide the insurance to them is so strong of a dynamic. We believe that the hypothesis is that our data can provide better pricing and better pricing for the coverage that they get. But the dynamics of those relationships are what we need to really get over to really start to get that piece off the ground. Payments, for an example, we released that last year. The initial feedback has been fantastic. It has been really good. Most of our closed beta customers are now paying customers, and we continue to sign up non-beta customers as paying customers. Now, what we're going to focus on in fiscal 2024 is really about implementation and adoption. It's still a very small part of our business, and you won't see that revenue come through for some time. And just kind of tactically and mechanically, how this works is, one, in the selling process, we're selling to a different user, an AP person or something like that. And that's just a little bit of a different motion. And then once you sign folks up, they have to get implemented. Both the GC and the SC have to get implemented with our banking partner. So that takes time. And then once they're up and running, you don't just change your payment process within the middle of a project. If I'm an SC, I don't want you to change your payment process in the middle of my projects. And so you have to wait till new projects come on to get volume to start running through Procore Pay. And that's what could take up to 24 months. But the focus this year is getting folks implemented, signed up, implemented, and to really get those first payment volumes to start running through Procore Pay. Okay. Interesting. So when we think about the pay opportunity, I think at the analyst day, you explained it well, how it's about the time that you might be saving different customers. Can you talk about that process a little bit? I kind of thought about my own expense process, and that's just me submitting a receipt. But maybe walk the different steps that Procore's helping there. I'm going to see if I can take that analogy and apply it to pay. The way to think about pay is not really as a standalone by itself. I think when you mentioned process, it's the very last mile to a long ecosystem and a long process for somebody to actually physically make that payment, for a GC to make that payment to an SC, one of which is the comfort to pay and who use, for example, liens and so forth, right? That's really the last mile. That also is related to how we're thinking about working capital in terms of early pay. Those would fit together as well. If I use your own personal finances, it's not just the fact that you're doing kind of an inventory of what you're going to pay and the bills that you're going to pay. It's actually going upstream and saying, "I had a budget, and I allocated that budget to different places. I got comfortable with spending this much on food. I got comfortable with my wife spending this much on clothes." And all those different things leading up to the last point where you have to pay your bill. It's really that entire process that pay is kind of putting a capstone on at the end of that. Okay. So obviously, there are some incumbent players like Textura. Autodesk seems to have made a small acquisition recently. When we think about who you're going up against, is it those competitors? And is that where the opportunity is? Or is it the folks who are manual processes? I don't know if there's a way to frame it. Yeah. So in the upper end of the market, it's definitely going to be Textura. And in fact, they created and set an example of a model that we would actually potentially mimic in terms of what the dynamics are in that market. So definitely, yes, there. When you start to get to broadly across all three stakeholders and GCs and SCs, I think what we're going to replace is your general AP processes, right? AP systems, AP software, and those types of things. And a lot of times, those processes and systems are going to be different across different companies. And so this is a way to actually put it all in one platform, in a consistent platform with a consistent interface that will just make it easier for folks and improve people's lives. Okay. Any final questions before I wrap it up with Howard? So, oh, go ahead. I want to go back around the new logos that you've seen. These customers are giving more wait-and-see mode that you mentioned. Are they taking more time to evaluate vendors in a more extensive RFP, or is this more so customers are being complacent and just kicking the can down the road? I don't know if they're complacent and kicking the can down the road. It's literally cautiousness about what might happen, right? And so in that instance, maybe they are evaluating different solutions. Those dynamics are not different, right? We've had competitive situations before, and we haven't seen any changes in win rates. But I wouldn't say they're kicking the can down the road. I think they're just being cautious about what might happen. And just like your own personal budget, if you're cautious about what's going to happen, you might make different purchasing decisions even though you still have the purchasing power to do that. And I think that's what we're seeing. Great. And last question, I always like to ask a final one. Last year, we learned you like steak in Danville. Someone we mutually know asked me to ask this. But as a Niners fan. Oh my God. You got to end on this. Really? Sorry. What do you think the team needs to do to get over the hump in filing one of these? You're really going to end on this. You're really going to end on this. I love my Niners. What does the team need to do to get over the hump? I think we made some wrong calls at critical points. And unfortunately, those calls had big impacts on the win-loss outcome of the game. And I think we made some progress there on the defensive coordinator on. Okay. Great. Well, thank you, Howard. Thank you, Procore. And hopefully, everyone has a good rest of the conference. Thank you.